A Reversal for SemGroup Corp Is Not Near. The Formed Wedge Down

The stock of SemGroup Corp (SEMG) formed a down wedge with $20.92 target or 5.00% below today’s $22.02 share price. The 7 months wedge indicates high risk for the $1.03 billion company. If the $20.92 price target is reached, the company will be worth $51.50 million less. Falling wedges are poor performers for bullish breakouts and are tricky moments to trade. Investors must be aware that the break even failure rate for up or down breakouts is: 11% and 15%. The average rise is 32% and the decline is 15%. The falling wedges has high throwback and pullback rate: 56%, 69% and the percent of wedges meeting target is not very high. The stock is up 3.87% or $0.82 after the news, hitting $22.02 per share. About 215,000 shares traded hands. SemGroup Corp (NYSE:SEMG) has declined 70.77% since July 29, 2015 and is downtrending. It has underperformed by 65.31% the S&P500.

Out of 7 analysts covering SemGroup (NYSE:SEMG), 6 rate it “Buy”, 0 “Sell”, while 3 “Hold”. This means 67% are positive. SemGroup was the topic in 7 analyst reports since August 10, 2015 according to StockzIntelligence Inc. Citigroup initiated the stock on December 15 with “Neutral” rating.

According to Zacks Investment Research, “SemGroup Corp provides gathering, transportation, storage, distribution, blending, marketing and other midstream services to producers, refiners of petroleum products and others market participants located in Midwest and Rocky Mountain regions of the United States of America. The Company operates in the pipeline gathering and processing segments of the natural gas midstream industry in the U.S. and Canada. It conducts its business through seven business segments- SemCrude, SemStream, SemLogistics, SemMexico, SemCanada Crude, SemGas and SemCAMS. Its asset base includes pipelines, gathering systems, storage facilities, terminals, processing plants, blending facilities and other distribution assets. It also maintains and operates storage, terminal and marine facilities in the U.K. and operates a network of liquid asphalt cement terminals throughout Mexico. SemGroup Corp is headquartered in Tulsa, Oklahoma.”

The institutional sentiment decreased to 1.12 in 2015 Q3. Its down 0.09, from 1.21 in 2015Q2. The ratio turned negative, as 44 funds sold all SemGroup Corp shares owned while 50 reduced positions. 25 funds bought stakes while 80 increased positions. They now own 42.68 million shares or 6.60% less from 45.70 million shares in 2015Q2.

Tph Asset Management Llc holds 3.29% of its portfolio in SemGroup Corp for 542,733 shares. Viking Fund Management Llc owns 357,000 shares or 2.71% of their US portfolio. Moreover, Palestra Capital Management Llc has 2.62% invested in the company for 628,141 shares. The Texas-based Eagle Global Advisors Llc has invested 2.33% in the stock. Beaconlight Capital Llc, a New York-based fund reported 74,913 shares.

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